Exposure to External Country Specific Shocks and Income Volatility

Changing Business Dynamism: Volatility of Shocks vs. Responsiveness to Shocks?

The pace of business dynamism as measured by indicators such as job reallocation has declined in the U.S. in recent decades, but this decline has not been monotonic for all sectors. For the High Tech sector, business dynamism as measured by the pace of job reallocation rose through the 1990s but then declined sharply in the post-2000 period. This is in contrast with the Retail Trade sector, whi...

Income Volatility and Health

We investigate the impact of exogenous income fluctuations on health using twenty years of data from the Panel Study of Income Dynamics. To unravel the impact of income on health from unobserved heterogeneity and reverse causality, we employ techniques from the literature on the estimation of dynamic panel data models. Contrary to much of the previous literature on health and socio-economic sta...

How Do Households Respond to Income Shocks

How do households respond to income shocks?∗

Commonly used consumption/saving models have radically different implications for households response to income shocks, ranging from the hands-to-mouth model, where consumption bears all the adjustment, to the complete markets model, where wealth bears all the adjustment. In this paper we use the Italian Survey of Household Income and Wealth, which is the only available micro dataset that conta...

Financial Development, Shocks, and Growth Volatility

In this paper, we argue that study of the effect of financial development and shocks on aggregate growth volatility will not be informative because they affect growth volatility through its different components. Financial development affects only the business cycle component of volatility and therefore, the effect on total volatility is dependent on its share in total volatility. On the contrar...